Oil prices rise on Middle East, Bernanke comments

Yikes!  It's a good thing we're drilling for oil here in the U.S.!  Oh wait, never mind.

Even still, I bet the rising oil prices are Bush's fault like before when oil prices went up.  Oh wait, he didn't ban off-shore drilling - never mind.

"Federal Reserve Chairman Ben Bernanke told Congress Tuesday that a prolonged rise in oil prices would hurt the U.S. economy."  Oh really? Doesn't take a rocket scientist to figure that one out, does it? Duh. Thanks for your sharing your brillance, Mr. Bernanke.

NEW YORK (AP) -- Oil prices climbed Tuesday as Iran clamped down on anti-government protesters and unrest in the Middle East threatened to keep energy prices high for months to come.

Benchmark West Texas Intermediate for April delivery gained $1.66 at $98.63 per barrel in afternoon trading on the New York Mercantile Exchange. In London, Brent crude gained $2.42 at $114.22 per barrel on the ICE Futures exchange.

The recent surge in oil has pushed up gasoline prices in the U.S. by nearly 20 cents per gallon in the past week. That's the sharpest increase since 2005, according to the Oil Price Information Service. Americans are now paying roughly $75.6 million more per day to fill up than a week ago.

The national average added another penny on Tuesday at $3.375 per gallon. Prices should keep rising to between $3.50 and $3.75 by spring, according to OPIS oil analyst Tom Kloza. He said future increases will be much more gradual, because gasoline markets have mostly priced in the recent rise in crude. "So we should flatten out" in coming weeks, Kloza said.

Oil prices surged 13 percent last week, peaking above $100 per barrel, as Libyan protesters expanded their control over the country. While the Libyan uprising continued Tuesday, news agencies reported that Iranian authorities imprisoned opposition leaders in Tehran. Iranian authorities denied the reports.

Pro-reform groups have clashed with the Iranian government. Jailing opposition leaders would be a major escalation of the country's political crisis. Iran exports about 2.5 million barrels of oil and natural gas liquids per day, about 3 percent of global demand.

The Iran protests are among the latest uprisings that have churned through North Africa and the Middle East, a crucial region that's responsible for most of the world's crude exports. Analysts say it's impossible to say how long it will take for uprisings to play out, but energy markets likely will be on edge through the summer.

Analysts added that they're still concerned about unrest in Algeria, which produces 1.8 million barrels per day, as well as increasing threats facing Iraq's oil supplies. Militants set off bombs in an attack on Iraq's largest refinery over the weekend.

The unrest which has forced oil companies in Libya to evacuate workers and shut down production operations has so far not had a major impact on world petroleum supplies, as refineries turn to other countries for oil including Saudi Arabia, which can crank up its production by another 5 million barrels per day.

The concern is that spare production capacity is now declining faster than expected, which means supplies could be harder to find in the future as global consumption increases.

"The pressure on spare capacity will be immense, as will be that on oil prices over the course of 2011," Barclays Capital analyst Helima Croft said in a research note.

Federal Reserve Chairman Ben Bernanke told Congress Tuesday that a prolonged rise in oil prices would hurt the U.S. economy. But he said runaway inflation is unlikely. "The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation," Bernanke said.

In other Nymex trading, heating oil added 5cents at $2.996 a gallon and gasoline rose 5cents to $2.9457 per gallon. Natural gas for April delivery fell 14 cents to $3.901 per 1,000 cubic feet.

AP Economics Writer Jeannine Aversa contributed to this story from Washington.